Why FX conversion costs matter when investing overseas and how to save on them with IG Markets

This post was created in partnership with IG Markets. All views and opinions expressed in this article are Beansprout's objective and professional opinions.

What happened?

One question that often comes up in the Beansprout community is "Which brokerage should I use to invest in US stocks?"

Naturally, many investors compare commission rates, platform fees, and the range of markets available.

Over the past few years, zero commission trading has become one of the biggest selling points for online brokerages.

As a result, investing in overseas stocks and ETFs has become more accessible than ever for Singapore investors.

But there's another cost that often goes unnoticed, which is foreign exchange (FX) conversion. 

If you're buying overseas stocks, you'll usually need to convert your Singapore dollars into another currency first. 

Depending on your broker, there may be additional costs in that conversion, which could gradually reduce your investment returns over time.

In this article, I'll walk through how FX conversion costs work and how investors can potentially reduce one component of these costs with IG Markets' current 0% FX Markup promotion.

What is an FX conversion cost?

When investing in overseas stock, you'll usually need to convert your Singapore dollars into another currency before placing your trade.

For example, if you're investing in US-listed stocks, your Singapore dollars will typically be converted into US dollars before your order is executed.

While this process may seem straightforward, the exchange rate you receive may differ slightly from the mid-market exchange rate, which is the reference rate you often see on Google.

This is because some brokers may apply an additional FX markup on top of the exchange rate they receive from their liquidity providers. 

This markup is one way brokerage platforms may generate revenue, particularly those offering zero-commission trading.

As a result, the total cost of converting currencies can vary depending on the brokerage platform you use.

When comparing brokers, it's helpful to look beyond trading commissions and understand whether any additional FX markup applies when you convert currencies to invest overseas.

How FX conversion costs show up when investing in overseas stocks

If your broker applies an FX Markup each time you convert currencies, you'll effectively pay it when buying and again when selling.

Example: how much are you actually paying?

Here's a simple illustration. Say you place a US$10,000 trade, and compare a platform charging a 0% FX markup against one charging 1%.

Illustrative example on a US$10,000 trade. Actual FX spreads vary by platform, and other fees may apply.

That US$200 works out to around S$270 at current rates (as of 5 Jul 2026). 

The costs can add up over time, especially if you invest regularly in a globally diversified portfolio with multiple markets and currencies or regularly rebalance your portfolio. 

Every dollar spent on additional FX markup is money that is no longer invested and compounding alongside your portfolio.

How investors can reduce FX conversion costs with IG Markets (share trading)

This is where I found IG Markets (share trading) worth a closer look. 

For a limited time, IG Markets is waiving its FX markup on eligible international share trades, so your money converts at the underlying rate from IG's third-party liquidity providers with no markup on top. 

#1 - Zero commission and platform fees, plus 0% FX markup for a limited time

With IG Markets Share Trading, investors pay S$0 commission, platform fees and settlement fees when trading shares and ETFs across five global markets. Mandatory market charges, such as SGX clearing fees or UK stamp duty, are still passed through at cost where applicable.

In addition, IG Markets is currently waiving its FX Markup on trades in non-Singapore-listed shares and ETFs for a limited time. For US shares, where there is no stamp duty, this means investors can significantly reduce the overall costs associated with investing overseas. Foreign exchange rates and spreads from IG Markets' liquidity providers will continue to apply.

The promotion is available to eligible IG Markets Share Trading accounts and is subject to terms and conditions.

#2 - Access to five global markets from one account

IG Markets covers stocks and ETFs across Singapore (SGX), the US (NYSE and NASDAQ), the UK (LSE), Hong Kong (HKEX) and Japan (TSE), all from a single account.

For those just starting out, IG Markets also offers fractional investing in US stocks, allowing investors to start from as little as US$1 rather than purchasing a full share. Larger investments also benefit from the 0% FX Markup during the promotional period.

#3 - Earn 3% p.a. on your shares and ETFs

IG Markets allows investors to earn a guaranteed 3% p.a. Interest on the first S$50,000 of qualifying invested shares and ETFs holdings.

The interest accrues daily, pays out monthly in SGD, and is capped at S$125 a month. On a S$50,000 holding of eligible shares and ETFs, you can earn up to S$1,500 a year in interest. 

To qualify, you only need to make one trade a month. 

This means your portfolio can potentially generate income while you remain invested for the long term, complementing any dividends or capital appreciation from your investments. 

Learn more about the 3% p.a. Interest on shares feature here. 

#4 - An easy-to-use  investing platform 

For many investors, keeping investing simple is just as important as keeping costs low.

IG Markets is designed with a mobile-first experience that makes it easy to invest in stocks and ETFs, without having to navigate a complex interface.

Getting started is straightforward too. You can open an account using Singpass MyInfo and fund it via PayNow, debit or credit card, or bank transfer, with investments starting from as little as S$1.

The app also shows you the applicable exchange rate before you confirm your trade. This provides greater transparency around your FX conversion, helping you understand the costs involved before placing your order.

For investors who have been putting off investing overseas because it seems complicated, a simple and intuitive investing experience can help reduce that friction and make it easier to get started.

For added peace of mind, IG Markets is operated by IG Asia Pte Ltd, which is regulated by the Monetary Authority of Singapore (MAS) and holds a Capital Markets Services Licence. 

What would Beansprout do?

When investing overseas, it's easy to focus on the headline costs, such as commission rates or platform fees.

However, FX conversion costs can also affect your overall returns, especially if you invest regularly or are building a long-term global portfolio. While each conversion may only cost a small amount, these costs can add up over time.

We would look beyond the advertised commission rates and consider the total cost of investing, including any FX Markup that may apply when converting currencies when considering a brokerage platform. 

If you're planning to invest in overseas stocks or ETFs in the coming months, IG Markets' current 0% FX Markup promotion could be an opportunity to reduce one component of your FX conversion costs. 

Coupled with zero commission trading across five global markets and the ability to start investing from as little as S$1, it may be worth considering if you're looking for a cost-efficient way to build a globally diversified portfolio.

Exclusive IG Markets (share trading) new user promotion

If you haven't opened an IG Markets share trading account yet, you can enjoy our Beansprout Exclusive welcome bonus from IG Markets:

These promotions apply to IG Markets (share trading) accounts only. Terms and conditions apply.

Learn more about the IG Markets (share trading) welcome rewards here.

Disclaimer: This article is meant for information only and should not be relied upon as financial advice. Terms and conditions apply. Please refer to IG Markets' official website for complete terms and conditions, disclaimers and disclosures. Trading is a high-risk activity, and it is possible to lose your initial investment. Investments are not covered by the Singapore Deposit Insurance Corporation (SDIC).

All content presented herein may contain advertisements. No content should be construed as investment advice, a recommendation, or an offer or solicitation to deal in any investment product. All investors should consider for themselves if the investment products are appropriate. Investors are advised to seek advice from a professional financial adviser if they are uncertain. Principal is not guaranteed. Past performance is not indicative of future performance. The value of investment products and the income from them may fall as well as rise. Investing contains risks and investors may lose all their investments. All investments involve risks and are not appropriate for every investor.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

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